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on Mainvestor GmbH / MAGNAT Real Estate Opportunities GmbH & Co (isin : DE000A0XFSF0)

DEMIRE Negotiates Bond Restructuring with Ad hoc Group of Bondholders

DEMIRE, under ISIN DE000A0XFSF0, is currently in discussions with a group of bondholders for the restructuring of its unsecured corporate bond, due on October 15, 2024. The entity, referred to as the Ad hoc Group, holds a significant portion 'well over 50%' of the outstanding nominal amount initially issued at €600m, with a current nominal amount of €499m. The company has laid out the potential terms of a restructuring agreement which includes extending the bond's term until December 31, 2027, at an increased coupon rate, along with additional compensation payments estimated to bring about a total annual cost of 6.5%.

The negotiations also propose mandatory repayments from the net sales proceeds of future asset disposals, a dividend payment ban for the bond's extended term, and additional collateralization in favor of the bondholders. Notably, the assets held for sale could potentially accumulate to approximately €180m in sale proceeds for 2024. Furthermore, DEMIRE is considering a bid to acquire a c. 20% portion of the outstanding nominal amount from one member of the Ad hoc Group, a move that could potentially be below market levels given the distressed situation of the seller.

As the potential restructuring and acquisitions are pending approval and further economic analysis, NuWays AG maintains a 'HOLD' rating on DEMIRE with a target price of €1.20. The outcome of these discussions remains uncertain, hence the recommendation and valuation stay unchanged at this point.

R. E.

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